NY/NJ port authority undertakes strategic plan

Wednesday, October 17, 2012

The Port Authority of New York and New Jersey is developing a strategic plan for the next 20 years, says Richard M. Larrabee, director of the authority’s Port Commerce Department.
At the same time, Larrabee said the country should examine new ways to fund port-related infrastructure such as bridges and roads, noting that improvements in places such as New Jersey have a national benefit to both consumers and businesses.
Speaking at the port’s annual Port Industry Conference on Tuesday, Larrabee said the agency hopes to complete the strategic plan, Project Port Horizon, by next summer.
When the agency last produced a strategic plan more than a decade ago, he said the challenges facing the port were fairly clear, including the need to handle growing volumes of cargo and much larger containerships.
He said these challenges are not as clear today. So the agency has embraced a “scenario planning” process allowing it to develop strategies that will work under different economic conditions or if technology changes, Larrabee explained.
Planners need strategies that can be backed out if the future becomes very different from what is anticipated today.
In the future, Larrabee believes the port will have to shift from infrastructure to having more logistics experts who are “more customer focused. The people we hire and people we employ are going to need to be much more aligned with the customer.”
The port will also need to “look at the environment we operate in and determine what we need to do to improve our ability to succeed.” He said that might include the port’s relationship with surrounding communities and development of new national policies to enhance the port’s ability to do better business and invest in infrastructure.
If the port doubles the amount of cargo it's handling, “we need to make sure the highways out of the port can support it,” he said. As an example, he noted the improvements the port is making to Global Terminal in Bayonne and how they will require an improved interchange on the New Jersey Turnpike.
He said the country needs some sort of national freight policy. A member of the port subcommittee of the U.S. Maritime Administration’s National Advisory Council (MTSNAC), Larrabee said that group has had “good conversations” with Transportation Secretary Ray LaHood about “what we need to make the system work better.”
“If we raise the Bayonne Bridge, that is a huge benefit to the people in Chicago,” and elsewhere in the country, he said. Improvements in New York benefit consumers by making the cost of transporting products such as televisions minimal and support President Obama’s plan to grow exports, Larrabee said.
With ships calling New York, exporters can reach nearly every part of the world, he noted.
“Freight should pay for itself,” Larrabee said, adding the country should look at a charge similar to the passenger facility charge paid by air travelers to fund improvements to port roadways that don’t have their own revenue source.
The Port of New York and New Jersey in March 2011 began applying a cargo facility charge on all imports and exports. For containerized cargo, it amounts to $4.95 per TEU.
The charge, which is raising about $30 million per year, is not enough, but Larrabee thinks it is “the beginning of the right approach.” - Chris Dupin